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  1. #1381
    Quote Originally Posted by duke79 View Post
    Unfortunately for GMO (and their investors), value investing has been out of favor, as growth stocks, especially large-cap tech stocks, have substantially outperformed value stocks over the past 10 years or so.
    The line it is drawn
    The curse it is cast
    The slow one now
    Will later be fast
    As the present now
    Will later be past
    The order is rapidly fading
    And the first one now
    Will later be last
    For the times they are a-changing

    - Zimmy

  2. #1382
    Quote Originally Posted by Jeffrey View Post
    The line it is drawn
    The curse it is cast
    The slow one now
    Will later be fast
    As the present now
    Will later be past
    The order is rapidly fading
    And the first one now
    Will later be last
    For the times they are a-changing

    - Zimmy
    LOL, yes, so true. The times are always changing. And, from an investment perspective, it's hard to accurately and correctly predict those changes. Reminds me of the famous Yogi Berra quote: "Predictions are very hard to make, especially about the future".

  3. #1383
    Quote Originally Posted by duke79 View Post
    LOL, yes, so true. The times are always changing. And, from an investment perspective, it's hard to accurately and correctly predict those changes. Reminds me of the famous Yogi Berra quote: "Predictions are very hard to make, especially about the future".
    True, it’s very hard to accurately and correctly predict those changes! Nevertheless, I believe we are now in a better financial/political environment for value than growth. In harmony, I’m also boldly calling a bottom on interest rates. Mr. Market now has multiple ways to possibly school me.

  4. #1384
    Mr. Market is being extremely generous and highly effective vaccines should be available soon. Thereís still a lot to be thankful for in America. Mr. Market clearly believes that.

  5. #1385
    Quote Originally Posted by Jeffrey View Post
    Mr. Market is being extremely generous and highly effective vaccines should be available soon. There’s still a lot to be thankful for in America. Mr. Market clearly believes that.
    No doubt this is part of what is driving the stock markets higher and, I think, many investors are anticipating that Joe B and the Dems in Congress are going to pump a LOT of money into the economy which should be good for the economy and for corporate profits in the short run. Plus, for many investors, there really is no other place to invest your money besides stocks. Of course, in the longer run, you have to wonder how all of the "free money" is going to be paid back. I'm predicting that by the end of Joe B's first term, the federal government is going to be $40 TRILLION in (direct) debt (and also with tens of trillions of dollars in unfunded liabilities). It has truly just all become "funny money" that will never get paid back and may eventually sink the country (see, e.g., Venezuela). There IS a reason why the dollar is now sinking fast against most other currencies.

  6. #1386
    Join Date
    Nov 2007
    Location
    Vermont
    I guess my primary concern now is how much of Mr. Market's optimism (e.g. re:vaccines) is responsible for price levels, and how much is based upon people looking there, anywhere, for yield.

  7. #1387
    Quote Originally Posted by duke79 View Post
    No doubt this is part of what is driving the stock markets higher and, I think, many investors are anticipating that Joe B and the Dems in Congress are going to pump a LOT of money into the economy which should be good for the economy and for corporate profits in the short run. Plus, for many investors, there really is no other place to invest your money besides stocks. Of course, in the longer run, you have to wonder how all of the "free money" is going to be paid back. I'm predicting that by the end of Joe B's first term, the federal government is going to be $40 TRILLION in (direct) debt (and also with tens of trillions of dollars in unfunded liabilities). It has truly just all become "funny money" that will never get paid back and may eventually sink the country (see, e.g., Venezuela). There IS a reason why the dollar is now sinking fast against most other currencies.
    Agreed, which is a key component of why I believe interest rates have bottomed. At some debt level, Mr. Market will demand a default premium.

  8. #1388
    Quote Originally Posted by Jeffrey View Post
    Agreed, which is a key component of why I believe interest rates have bottomed. At some debt level, Mr. Market will demand a default premium.
    Yea, I doubt interest rates will stay this low forever. Eventually, the bond vigilantes around the globe will demand that the US pay higher rates before they will buy our debt (and then we'll be in trouble). I just checked - the 20+ year US bond inverse ETF ("TBT") is already up 12% since late November. Not a bad bet to hedge rising interest rates.

  9. #1389
    Join Date
    Dec 2016
    Location
    Las Vegas, Nevada (Ohio born and raised)
    Speaking of luck, my wife and I bought our first house in 2016 for only $250k. We will be selling it in May and it looks like it will go for about $350k. So lucky and fortunate, so far! I got really worried when the pandemic hit but Vegas has weathered the storm even with high unemployment thanks to low inventory, California buyers, and low interest rates. Letís keep it up a few more months!

  10. #1390
    Quote Originally Posted by duke79 View Post
    Yea, I doubt interest rates will stay this low forever. Eventually, the bond vigilantes around the globe will demand that the US pay higher rates before they will buy our debt (and then we'll be in trouble). I just checked - the 20+ year US bond inverse ETF ("TBT") is already up 12% since late November. Not a bad bet to hedge rising interest rates.
    True, or buy (asset rate sensitive) bank stocks.

  11. #1391
    Quote Originally Posted by Jeffrey View Post
    True, or buy (asset rate sensitive) bank stocks.
    Yes, bank stocks will benefit (assuming the economy doesn't tank and loans go bad); also gold and even bitcoin (now at 38,000!! Crazy, IMHO).

  12. #1392
    Quote Originally Posted by LasVegas View Post
    Speaking of luck, my wife and I bought our first house in 2016 for only $250k. We will be selling it in May and it looks like it will go for about $350k. So lucky and fortunate, so far! I got really worried when the pandemic hit but Vegas has weathered the storm even with high unemployment thanks to low inventory, California buyers, and low interest rates. Let’s keep it up a few more months!
    Awesome! This has been an extremely strange recession. Historically, home prices usually fall, during a recession, and certainly don’t increase. Congratulations!

  13. #1393
    Quote Originally Posted by duke79 View Post
    Yes, bank stocks will benefit (assuming the economy doesn't tank and loans go bad); also gold and even bitcoin (now at 38,000!! Crazy, IMHO).
    Substantially more stimulus should translate to less loan defaults. Especially, those who lend to higher risk customers.

    IMO, investing in bitcoin is like gambling in Vegas. People should do it for sport, not their financial future.

  14. #1394
    Join Date
    Nov 2007
    Location
    Vermont
    Quote Originally Posted by Jeffrey View Post
    Substantially more stimulus should translate to less loan defaults. Especially, those who lend to higher risk customers.

    IMO, investing in bitcoin is like gambling in Vegas. People should do it for sport, not their financial future.
    I've been wondering about the unfortunate folks who can't pay rent, be they apartment dwellers, business owners (RIP bars and restaurants) and therefore also a lot of the landlords can't pay the bank...

  15. #1395
    Quote Originally Posted by budwom View Post
    I've been wondering about the unfortunate folks who can't pay rent, be they apartment dwellers, business owners (RIP bars and restaurants) and therefore also a lot of the landlords can't pay the bank...
    I’ll generously give you the short answer…

    The CARES Act gave lenders a lot of abnormal flexibility on loan date extensions. Normally, regulators attempt to limit massive extensions, but they have been relatively powerless. As a result, delinquency schedules reveal little about current ability to pay.

    The first round of PPP included total loan forgiveness, for most participants, regardless of the participants’ profitability status. For example, a company I invest in (Atlas Airway) was given/forgiven $400 million, even though they were highly profitable, mostly flying Amazon packages, in 2020. A substantial amount of PPP funds paid mortgage, lease, and rent payments.

    Bank deposits have grown substantially (10-30%) in 2020 largely due to stimulus payments. Aggregate ability to pay is surprisingly high.

  16. #1396
    Quote Originally Posted by Jeffrey View Post
    I agree, an investor cannot review the individual loans, in a bankís portfolio, to determine overall credit risk. OTOH, itís not hard to learn the type and breakdown of loans a bank is holding.

    Thereís definitely significant risk in all bank stocks! However, thereís also significant potential return. You expressed similar, very appropriate, risk concerns in April. CFG and CMA have posted solid returns since...

    https://forums.dukebasketballreport...07#post1249007

    Every trade requires a difference of opinions and Iím due (mean regression) for a big miss! However, I still think C will hit 70 in the next 12 months.
    FWIW, my plan, two months ago, was to make a relatively quick 50% and sell C when it hit 70. Now, at 67, I like C more than most alternatives and may not sell at 70. Overall, Iím continuing to take profits in order to keep my equity holdings at 60% of my net worth. Iím still very heavily weighted in individual financials.

  17. #1397
    There are times, like this morning, when I wonder if Mr. Market smokes crack? JPMís earnings report today was strong and the stock is down 2.5%. Wonder why Mr. Market thinks JPM is worth 2.5% less than yesterday?

  18. #1398
    Quote Originally Posted by Jeffrey View Post
    There are times, like this morning, when I wonder if Mr. Market smokes crack? JPMís earnings report today was strong and the stock is down 2.5%. Wonder why Mr. Market thinks JPM is worth 2.5% less than yesterday?
    How was their guidance?

  19. #1399
    Join Date
    Feb 2018
    Location
    Durham, NC
    Quote Originally Posted by Jeffrey View Post
    There are times, like this morning, when I wonder if Mr. Market smokes crack? JPMís earnings report today was strong and the stock is down 2.5%. Wonder why Mr. Market thinks JPM is worth 2.5% less than yesterday?
    Mr. Market smokes crack, drinks heavily, is a teetotaler, is an evangelist, is an atheist, is a day trader, is in it for the long haul, is an algorithm, is a live trader, is analytical, is completely emotional, etc., etc. A blip is not a trend, and it could just be random herd noise.

  20. #1400
    Quote Originally Posted by YmoBeThere View Post
    How was their guidance?
    Not a guidance issue, especially, with Jaime in charge. IIRC, Dimonís last big miss was the London Whale.

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